Allowance for Doubtful Accounts Has a Debit Balance of $980

question 61

Multiple Choice

Allowance for doubtful accounts has a debit balance of $980 at the end of the current year (prior to adjustment) . Net credit sales for the current period amount to $950,000 and 2.5% is estimated to be uncollectible. The adjusting entry would require a debit to:

• A)bad-debt expense for $23,750.
• B)allowance for doubtful accounts for $24,730.
• C)allowance for doubtful accounts for $22,770.
• D)accounts receivable accounts for $23,750.

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Definitions:

Linear Perspective

A technique in art and photography that creates the illusion of depth on a flat surface, using converging lines to mimic how our eyes perceive distance.

Depth Cue

Visual information that allows a person to judge the distance and depth of objects in their environment.

Opponent-Process Theory

A psychological and neurological model that explains a wide range of behaviors including vision and emotions by suggesting that opposite emotions and sensations are regulated by paired processes.

Visual System

The part of the central nervous system which enables individuals to process visual detail, it includes the eye, retina, optic nerves, and brain visual cortex.